Question

2 - Marie is the CEO of Minox Ltee, a small machine shop, that does business with several large auto manufacturers. Several years ago, a competitor's CEO asked Marie whether Minox would like to create a trade relationship to discuss common business issues like marketing practices and pricing. Marie said that she was not interested. Shortly thereafter, Marie heard that a trade association was created among 3 of her main competitors. Recently, she has noticed these competitor's products are always priced the same and she wonders if she should report this to the Competition Bureau. A - What Competition Act issues does this scenario raise? B - Should Marie report this incident ? Why or why not ? 15 marks

SUBJECT IS BUSINESS LAW.

Answer 1

A. Competition Act was passed with the objective that fair competitive must sustain in the market and any kind of monopoly must get discouraged. Competition Act was required to ensure that companies thrive and compete in a healthy competition environment. However in the given case, Marie has come to know that a trade association has been created between 3 of her major competitors. This trade association is maintaining a monopoly like scenario in the market as the 3 competing companies are maintaining the same price in any market situation. This is clearly a violation of the Competition Act.

B. Marie was consulted by a competitor’s CEO years ago and the same trade association proposition was discussed with her. Marie however had not shown interest in the proposition at that time. She did not inform the regulatory organization about the same earlier. This was her mistake. However she has got an opportunity to amend her mistake. She can report about the trade association to the regulatory body of the region and share her experience. She may get reprimanded about not reporting the incident earlier. However she would facilitate the adherence of Competition Act by reporting the issue.